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Old 10-26-2008, 05:58 PM   #41
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Agreed. Even if GE treads water for a few years before recovering, IF they can maintain this dividend through it and you can reinvest these high dividend yields at depressed prices, it would be a very solid long term play since it's a pretty safe bet they ain't going under. Again, that's IF they can maintain the dividend or at least close to it.
Next year GE's estimated earnings are $1.80 and this is from a company which traditionally produces earnings within a penny or two of estimates each quarter. I think it would take an outright depression before they cut dividends after saying they wouldn't cut them in 2009. Although there is a decent chance the 36 year streak of raising dividends may come to an end.
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Old 10-26-2008, 06:40 PM   #42
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looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer
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Old 10-26-2008, 06:48 PM   #43
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looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer
Your source is incorrect. It probably didn't correct the back dividends for a stock split in 2000.
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Old 10-26-2008, 06:50 PM   #44
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Short of getting a warren buffet deal... I would not buy. IF you want to own it... buy berk hatty... then you can get the buffet deal.
I don't think I agree with this. GE at Friday's close yields 7%. True, Buffet's preferred yields 10%, but it is effectively convertible at a share price of 22.5, which 25% above Friday's close, so I think one could argue that buying GE outright today may be as good (or better) than Buffet's deal.

Furthermore, if you are retired and want dividend income, BRK doesn't pay a dividend, but you will get a dividend from direct ownership of GE.
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Old 10-26-2008, 11:25 PM   #45
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Unfortunately GE is still about 1/2 a bank (GE Capital). When it was 60 under Jack Welch it was way over valued. Won't come back until financial mess is cleaned up. Buffett gives vote of confidence at 10%. I think Immelt will do whatever it takes to maintain AAA rating.
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Old 10-27-2008, 02:15 AM   #46
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looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer

You forget to account for the 3 for 1 split of GE stock back in 2000.
Per GE's website there dividend has increase for .10/qtr back in 1998 to .31 today over a tripling of income.

Over the last 20 years GE has increased its dividend at annual rate of 12.3%, now I realize that this time is different and GE did slash its dividend during the great depression (and the stock priced dropped to 8% of its peak price in 29.) Incidentally the Great Depression is when the bank part of GE (GE finance) started.
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Old 10-27-2008, 03:55 AM   #47
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I would like to say that based on keeping my eyes open for many years, this very well articulated opinion is mostly worthless as a guide to what to do. All scenarios, including any that I might make, are the same. We cannot know the future. What we do incontrovertibly know is that right now major US companies are very cheap, relative to anything most of us have ever seen during our entire investing lifetimes, relative to governments, relative to historical PE10s, relative to Tobin's Q.

Ponder that.

Ha
Oops.. I do apologize for horning in on the stock picking forum... that is the topic. Got here from the portal.

I have pondered it.

I have a coworker that has ridden GE sideways for several years since the tech bust. GE is a semi-regular topic of discussion.

I sold my last few mega-cap stocks (other similar leaders) when I realized that they performed marginally better (if even that) against large cap indexes.

Concentration can yield better returns than diversification if one is a good enough disciplined portfolio manager. As I approach ER I have been sticking with broader diversification.

GE has often beaten the S&P in the past (when Jack ran it). Jack appeared to be good at keeping earning consistent and attractive ( accounting techniques)... My former boss referred to it as earnings smoothing. Jack also performed aggressive portfolio management (trimming of low earning businesses). Plus he would lay off people (trim 10% of the lowest performers keep everyone on their toes). All of this resulted in a historic return that was a couple points better than the S&P 500 by a couple of points (in the past). Jack is gone and SOX is in.

If GE beats the index... it will probably not do so by much... that (potential) benefit (if achieved) will have a cost of taking on company risk... With GE, the risk is fairly low over the long haul.

You will have market risk either way by the nature of being in the market unless you hedge... but using a hedge will lower returns.

I hope GE does well... I own it! But I own it in a fund.
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Old 11-12-2008, 10:53 AM   #48
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Amazing. GE is trading in the 16's today. And I thought it was cheap at 22! Things are starting to look like the entire capital side of the business is worthless.
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Old 11-12-2008, 10:58 AM   #49
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Bought early this morning at $17.20, I should have broadcasted it so you guys can short the stock.

mP
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Old 11-12-2008, 11:00 AM   #50
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Oops.. I do apologize for horning in on the stock picking forum... that is the topic. Got here from the portal.

I have pondered it.
I'm sorry I sounded snippy. You make a good point.

I own GE, and achieve what I hope to be adequate diversification by owning many other securities. So far, diversification among equity classes has not been much help at avoiding loss.

For me, funds suck up too much of the yield.

Ha
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Old 11-12-2008, 11:10 AM   #51
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GE is one of the foundational stocks we are putting our clients into. I think that despite it's problems, it is fundamentally a good company.

Also, PG, ADM, and MO are to me no brainers. See my disclaimer before you jump in.........
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Old 11-12-2008, 11:57 AM   #52
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GE is one of the foundational stocks we are putting our clients into. I think that despite it's problems, it is fundamentally a good company.

Also, PG, ADM, and MO are to me no brainers. See my disclaimer before you jump in.........
I prefer PM to MO. Do you have any comment on this pair?

Ha
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Old 11-12-2008, 02:15 PM   #53
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I prefer PM to MO. Do you have any comment on this pair?

Ha
Might just be different taste. I can see why PM was spun off. However, I have always had success with MO, their dividend is nice these days.
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Old 11-12-2008, 02:28 PM   #54
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A negative on owning GE. Isn't part of the price of taking government bailout money that you cannot increase your dividend for 3 years w/o government approval? On top of that government seems to really be discouraging dividends for the program. The pressure to suspend dividends on any entity that receives government money is going to ramp up next year:

New York Times calls for end of dividends on 10/20/2008

http://www.nytimes.com/2008/10/21/op...1stein.html?hp

11/12/2008 Fed warns banks on dividends

Bloomberg.com: Economy

I would not add new funds to any company that is getting bailout dollars until they emerge from the plan. Much of this may be why the banking sector is falling back below the July lows.
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Old 11-12-2008, 02:31 PM   #55
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Perhaps I spoke too soon, looks like GE may break into the 15's before the day is done. Currently at $16.05
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Old 11-12-2008, 02:39 PM   #56
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A negative on owning GE. Isn't part of the price of taking government bailout money that you cannot increase your dividend for 3 years w/o government approval? On top of that government seems to really be discouraging dividends for the program. The pressure to suspend dividends on any entity that receives government money is going to ramp up next year:

New York Times calls for end of dividends on 10/20/2008

http://www.nytimes.com/2008/10/21/op...1stein.html?hp

11/12/2008 Fed warns banks on dividends

Bloomberg.com: Economy

I would not add new funds to any company that is getting bailout dollars until they emerge from the plan. Much of this may be why the banking sector is falling back below the July lows.
It might be, but it only says you can't INCREASE your dividend. You are still allowed to pay your CURRENT dividend. It makes sense that when the Fed is giving you what in effect is a low interest note that THEY get paid back first........
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Old 11-12-2008, 04:12 PM   #57
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It might be, but it only says you can't INCREASE your dividend. You are still allowed to pay your CURRENT dividend. It makes sense that when the Fed is giving you what in effect is a low interest note that THEY get paid back first........

I think that is a reasonable compromise but shareholders (like me) of banks such as BBT, and WFC that didn't need the TARPs money would be really screwed but suspending dividends.
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Old 11-13-2008, 09:36 AM   #58
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How far down will it go? I can't really see any news other than the market in general to explain things. Am I missing something? I bought some GE in the 20's so not doing too well but thinking of buying some more at these levels but it continues to go down further.
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Old 11-13-2008, 12:02 PM   #59
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How far down will it go? I can't really see any news other than the market in general to explain things. Am I missing something? I bought some GE in the 20's so not doing too well but thinking of buying some more at these levels but it continues to go down further.
It seems to be an amazing decline for GE and GS since Warren Buffet bought as a show of confidence. Both since 10/1 are now down about 50 percent. GE is denying market rumors of a dividend cut and claiming they will maintain. The market is not believing them, and in the current market condition it actually would be more fiscally prudent of GE to eliminate it's dividend, they just have too much debt and counting on the FED too much to roll over their paper.

Many of the banks such as BAC, wFC are under similar declines, seems mostly dividend fears as well as the notice from Paulson that they are not now going to buy the bad paper so the losses will sit on the financial entities.
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Old 11-13-2008, 12:14 PM   #60
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I don't see capitulation yet, we need that before we can see any kind of rally. I knew the tech bubble was about to burst, when daytraders were regularly profiled in the WSJ and 75 year old men who never invested in anything but CDs in their life wanted to buy CMGI and TYC.........
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